CrowdWorks : FY2020 Q3 Presentation Material for IR

KOBAYASHI PHARMACEUTICAL CO., LTD. Ms. Kawai (Client)

Leverages diverse external talent resources for new product design ideas

"We request new product design ideas, and get quite a lot in a short timespan. That's given us the increased breadth we've wanted in design exploration."

Renoveru,Inc. Ms. Meo (Client)

Outsources video production using Direction Partner, our incorporated worker introduction service

"By taking work that was costing us a lot on in-house staff hours and outsourcing it to pros, we have been able to efficiently create high-quality video."

"Workstyle Revolution"	Securities code: TSE Mothers 3900

CrowdWorks, Inc. Financial Results for the Third Quarter of the Fiscal Year Ending Sept. 30, 2020

(from Apr. 2019. to Jun. 2020)

Ms. Yoshizaki (Maintains multiple roles as a librarian, babysitter, and CrowdWorker

Became a Crowd Worker due to the coronavirus, is building a lifestyle where he "wears three hats," with more than 50 orders over three months

"I started working side jobs because of the risk from staying with a single employer. The benefit of CrowdWorks is that I can work on my own schedule and manage my own time."

Mr. Hirano (Maintains multiple roles as a real estate consultant, WEB writer, and CrowdWorker)

While continuing to work as a real estate consultant, I became a sideline writer after a local government co-hosted seminar on how to work.

"I started a writing business on the side, using my experience from my hobby and day job. I've

recently launched a website by my own, which has given me a new challenge."	0

CrowdWorks Business Overview

We operate a new kind of online talent matching platform, developed inhouse, connecting companies with individuals and allowing them to order work directly.

	"CrowdWorks"
	Job request
641,000	Matching directly connects both parties
Job operation/delivery

Client Companies

• Access to human resources with the right skills/track record
• Requests can be made as needed, when needed
• No additional fee for job requests

3,935,000

Crowd Workers

• Access to jobs fitting own skills/situation
• Work flexibility according to your lifestyle
• Assistance can be given to make contracts and get paid

1

The #1 Online Talent Matching Platform

CrowdWorks is the Number One

online talent matching platform in the industry

FY2019
Lancers, Inc.
Total Contract Value
14,800
million yen		Mirai Works Inc.

VisasQ Inc.

* Compared with similar companies' public information

14,800 million yen

6,400 million yen

3,500 million yen

1,000 million yen

2

Diversifying Workstyles, Expanding Online Talent Markets

After the coronavirus, telework and flextime become the "new normal" in workstyles 4 million diverse, talented personnel registered for CrowdWorks, providing a tailwind

Introduction of staggered work hours, flextime system

90% of managers intend to act in response to ongoing telework trend

90.9%	89.4%	Respondents: 132 major
domestic firms

55.3%

40.4%

• Created from excerpted data from The Nikkei, "Survey of 100 Presidents: 70% Reviewing Supply
  Network, Searching for the New Normal: 90% Continuation of Telework" (Unofficial translation) June 1, 2020

Companies/municipalities newly allowing side

work in 2019/2020

Organizations permitting employees to take side jobs

• Kagome Co., Ltd.
• Asahi Breweries, Ltd.
• SMBC Nikko Securities Inc.
• Mizuho Financial Group, Inc.
• Lion Corporation
• Kirin Holdings Company, Limited.
• Aozora Bank, Ltd.
• Fukui Prefecture

Organizations hiring employees seeking side jobs

• Yahoo Japan Corporation
• Mitsubishi Estate Co., Ltd.

and others

• Created by taking firms/government orgs listed in The Nikkei

articles

3

Growth in Clients Accepting Online Talent

New management style becomes commonplace, premised on remote/side work High demand for CrowdWorks' services matching companies and online talent

Coronavirus spurs evolving management styles

Hired talent located	Hiring core employees
onsite/in-office	with exclusivity

Office reductions/		Allowing side work
lease terminations

Proactive utilization of

More home/remote workdiverse talent (e.g. freelancers, side

workers)

Approx. 95% of clients leveraging engineer talent allow remote work:

a 45% increase in one year

Fully remote	Partially remote		Onsite

	Approx.
100%	95%
Approx.
50%
0%

• Share of onsite, partially remote, and fully remote work as a portion of the total number of clients utilizing our registered engineer matching services

4

Amid a Tailwind, Cumulative Group Worker Count Trends Strongly

The number of workers in the entire group: 3,935,000 people (as of Jun. 30, 2020) Approx. 1 million increase from end of the previous year (+33.8% growth)

[Units: ten thousands of workers]

73.7 79.6 86.4

50.0 58.0

13.7 18.3 22.5 26.9

+1 million

393.5

(+33.8%)	369.2
	332.9
	316.4

294.0

Impact from TV	271.2
broadcasts	250.0
	232.9

203.3

188.9

173.9

147.0 154.9

132.1

117.2

96.8 105.2

As of	As of	As of	As of	As of	As of	As of	As of	As of	As of	As of	As of	As of	As of	As of	As of	As of	As of	As of	As of	As of	As of	As of	As of	As of	As of
Mar. Jun. Sept. Dec. Mar. Jun. Sept. Dec. Mar. Jun. Sept. Dec. Mar. Jun. Sept. Dec. Mar. Jun. Sept. Dec. Mar. Jun. Sept. Dec. Mar. Jun.
31,	30,	30,	31,	31,	30,	30,	31,	31,	30,	30,	31,	31,	30,	30,	31,	31,	30,	30,	31,	31,	30,	30,	31,	31,	30,
2014	2014	2014	2014	2015	2015	2015	2015	2016	2016	2016	2016	2017	2017	2017	2017	2018	2018	2018	2018	2019	2019	2019	2019	2020	2020

5

Business Policy is Unchanged for FY 2020, with Continued Focus on the Matching Business

Matching Business

Project

Contracting

Business

Fintech

Business

M&A

FY 2019 review

In addition to the tailwind in the marketplace as a whole, we strengthened our client-targeted advertising and sales force, achieving favorable growth.

We also determined there will be sufficient returns in unit economics in a two-year period and intend to carry out investment targeted to long-term growth for this reason.

Consolidated quarterly performance figures were severely affected by the delivery period of projects, resulting in reduced growth rate. Take rate was decreased due to soaring project costs.

We intend to optimize the profit and downsize this business as part of our revised growth plan for the future.

Decided to withdraw in the early stage because of intensifying competition after the entry.

We consider FinTech to be a strategic theme we should be involved with and intend to re-enter the market at a later date, following long-term observation.

Achieved operating profit surplus for existing projects. Through PMI for existing projects, we solidified our capital efficiency guidelines, and as a result we were unable to implement any M&A projects for FY 2019. We will continue considering future opportunities based on these guidelines.

FY 2020 policy

Focus on

investment

Downsizing

with

profitability focus

Continuing

consideration

6

Q3 FY 2020 Results: Summary

7

Q3 FY 2020 Performance Highlights (Entire Company)

Total contract value

Net sales

Gross profit

EBITDA

Operating profit

11,875 million yen

year-on-year +9.7% vs. full-year forecast +73.6%

7,072 million yen

year-on-year +8.6% vs. full-year forecast +78.8%

2,607 million yen

year-on-year +11.5% vs. full-year forecast +76.7%

-11 million yen

year-on-year-167 million yen

-98 million yen

year-on-year-160 million yen

8

Q3 FY 2020 Segment Performance Highlights

The matching business maintained steady growth despite coronavirus.

The project contracting business maintained steady profit, with net sales and gross profit exceeding full-year forecasts.

Subsidiary sale (see next page) completed as of July 10th.

	Matching Business	Project Contracting Business	Other
Total	9,461 million yen	(+19.8% YoY)	2,296 million yen	(-8.9% YoY)	116 million yen
contract
value
Net sales	4,679 million yen	(+27.1% YoY)	2,276 million yen	(-9.7% YoY)	116 million yen
Gross profit	2,040 million yen	(+25.2% YoY)	523 million yen	(-1.3% YoY)	44 million yen
EBITDA	-82million yen (-58 million yen YoY)	146 million yen	(+65 million yen YoY)	-76 million yen
Operating	-105million yen (-54 million yen YoY)	84 million yen (+34 million yen YoY)	-77 million yen
profit

9

Sold Project Contracting Business as of July 10

Sold subsidiaries (Denen/IOSI) in the project

contracting business to SB Technology Corp.

Reinvested funds from sale into matching and new businesses

Net Income	Increase in Cash
¥310 million	¥1.28 billion

*FY2019 performance for Denen & IOSI: Net sales 3.05 billion yen, operating profit 110 million yen

We have revised performance forecasts as these will be removed from the scope of consolidation as of Q4. Please see p.17 for more details.

10

Q3 FY 2020 Performance Review

	Summary	Self
	Evaluation
Entire	• Company-wide total contract value was up +9.7% and gross profit was up	Great
Company	+11.5% year-on-year, with growth beating forecasts.
	• Total contract value was up +19.8%, with net sales up +27.1% and gross
	profit up +25.2% year-on-year. Business growth continued despite impact
	from decreased orders due to temporary economic downturn.
Matching	• Take rate improved to 21.6%, up +1.0% year-on-year
• In light of the spread of the coronavirus and the economic situation, TV	Great
Business	commercial broadcasts were temporarily suspended; however, expenses
	were invested to boost web advertising, with operating profit at -1.05 million
	yen, in line with policy at the beginning of the year.
	• Investment is to be expanded further in Q4, with additional TV commercial
	testing.
	• Total contract value, net sales, operating profit all settle above full-year
Project	forecasts.
• The share transfer of subsidiaries was confirmed in July, building a system to	Great
Contracting
accelerate further focusing on the matching business.
Business
• Subsidiaries are to be excluded from consolidated performance on and after
	Q4.

11

Impact to performance from the Coronavirus

12

Impact to 3Q from the Spread of the Coronavirus

Though new client acquisition was impacted by the state of emergency declaration, this figure began to recover in June Growth strategy from the next fiscal year and beyond remains unchanged, targeting growth in the matching business

		Growth in new client total contract value		Despite temporary corona
			(monthly, year-on-year)
				impact,
		New client growth
				115.6%
115.0%	114.6%		113.9%
	Recovered to
			109.7%

103.1%

100.4%

Spread of

State of

coronavirusemergency

pre-corona levels in June/July

Jun 2020

Feb 2020

Mar 2020

Apr 2020

May 2020

Jun 2020

Jul 2020

13

Impact from Productivity Improvement Project

We launched our productivity improvement project alongside investment selectivity and focus even before the spread of the coronavirus.

These efforts succeeded in drastic reduction (280 million yen) in overhead SG&A costs, while still achieving gross profit targets from our initial budget.

	2,607
Gross Profit
Initial	Actual
Budget	3Q
	Cumulative

	848
Overhead /
	SG&A
Initial	Actual
Budget	3Q
	Cumulative

Gross profit:

Achieved target

Overhead/SG&A:

Reduced by ¥280 million

(vs. Q1-Q3 budget)

14

Full-year Forecast

15

Revisions to FY2020 Full-year Performance Forecast: Entire Company

Revised FY2020 full-year performance forecast in consideration of impact from: 1. Share transfer of subsidiaries 2. Coronavirus 3. Cost reductions

Total contract value :	15,011 million yen	+1.5% growth year-on-year
Net sales	:	8,550 million yen	-2.3% growth year-on-year
Gross profit	:	3,300 million yen	+5.7% growth year-on-year
EBITDA	: -400 to -500 million yen	From continued investment in
			the matching business per initial
Operating profit	: -500 to -600 million yen	planning

About the total contract value,

net sales, gross profit

• Matching business continues to grow steadily
• Project contract business excluded from Q4 performance due to transfer of subsidiary shares

About the EBITDA and operating profit

• Continuing to make prior investments, such as in TV commercials
• Targeting improved growth rates and maximized profits in medium/long-term
  16

Revisions to FY2020 Full-year Performance Forecast: Segment-by-segment

Matching business: Net sales/gross profit grow 20%+ even after coronavirus impact

Project contract business: Changed format to book only results up to Q3 due to sale of subsidiaries

	Matching Business		Project Contracting Business	Other
Total contract	12,600 million yen	(+14% YoY)		2,300 million yen	(-30% YoY)	111 million yen
value
Net sales	6,150 million yen	(+20% YoY)		2,300 million yen	(-30% YoY)	100 million yen
Gross profit	2,710 million yen	(+20% YoY)		520 million yen	(-25% YoY)	70 million yen
		(Same period of previous fiscal			(Same period of previous
EBITDA	-410 to -510 million yen	year 18 million yen(profitable)		110 million yen	fiscal year 146 million yen	-100 million yen
Trending on course with initial		Maintaining profit current
		plans due to prior investment)			level)
Operating		(Same period of previous fiscal			(Same period of previous
-450 to -550 million yen	year -15 million yen (profitable)		500 million yen	fiscal year 62 million yen	-100 million yen
profit	Trending on course with initial		Maintaining profit current
	plans due to prior investment)			level)

• Figures for FY 2019 have been revised to reflect a change in the Company's business segments and got a full-year audit for the expenses of each segment.
• Accounted CrowdLinks to the matching business and costs of the project contracting business for M&A to the previous year, reflected intra-group transactions between each segment to the previous year are main points of modification.

17

Q3 FY 2020 Results (Entire Company) : Details

18

Entire Company: Consolidated Total Contract Value

Company-wide consolidated total contract value has grown in line with initial estimates, settling at
+9.7% year-on-year.		11,875
				+9.7%
		Matching Business
		Project Contracting Business	10,825	4,192
		Other	3,970
				3,852	3,829
				3,735
				3,611

3,478

[Units: Millions of yen]

2,946

2,327

3,060

2,850

1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q
		FY 2018			FY 2019				FY 2020

19

Entire Company: Consolidated Net Sales

Company-wide consolidated net sales beats initial full-year forecast of +3%, growing +8.6%.

				+8.6%	7,072
Matching Business
Project Contracting Business
	6,513			2,546
Other
					2,342
		2,203	2,282	2,236	2,183

[Units: Millions of yen]

1,867

2,027

1,792

1,622

1,352

1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q
		FY 2018			FY 2019				FY 2020

20

Entire Company: Consolidated Gross Profit

Company-wide consolidated gross profit grew steadily, to +11.5%.

									+11.5%	2,607
							2,338			951
			Matching Business
			Project Contracting Business					850
			Other
						781	792	784	805
				764
[Units: Millions of yen]
697	680
572	567

1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q
		FY 2018				FY 2019			FY 2020

21

Company Consolidated Sales, General, and Administrative (SG&A) Expenses

SG&A expenses was suppressed vs. Q2. TV commercials were suspended, and investment in web advertising was boosted. In Q4, web advertising investment is to continue, with a parallel relaunch of TV commercials.

					Labor cost
					Outsourcing
					Other
					Advertising
					SG&A to Gross
					Revenues Ratio
100.9%
[Units: Millions of yen]		93.8%
							85
		66
							198
		181
							35
		20
		307		334

									TV com. test
							Web		¥100 million
							advertising		Web
							¥100 million		advertising
	120.6%								¥180 million
							215	194
							110
			97.1%		96.8%	76	101.8%		99.4%
		98.2%		102.5%		110.4%
			103
		114	120
58							245
		85.0%
					251		254	211
	18
			239
221		238	225
	198						73	58	65
					76
34		45	49	54
	34
						393	442	416	418
369		352	362	369
326

1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q
	FY 2018				FY 2019				FY 2020

• Starting this fiscal year, new hiring and education expenses are aggregated into labor costs. Past values are shown with this recalculation in effect.
• Other costs include rent for land, expenses for communication lines, settlement fees, payment fees, taxes and public dues, depreciation, and amortization of

goodwill.

22

Company Consolidated Operating Profit

Operating profit settled at a loss of 98 million yen due to expanded investment in web advertisements for the matching business, per initial policy

				Operating profit		135
				EBITDA
											102
[Units: Millions of yen] 81																			-98
																		56		52
													46
42						23			25									34
17								13					11		7
													5
-4
															-14
																						-21

-53

-83

-83

-116

1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q
	FY 2018				FY 2019				FY 2020

23

Q3 Results of Segments: Details

24

Q3 FY 2020 Performance of Individual Segments

Focus on the matching business as per this year's policy led to +19.8% total contract value, 21.6% take rate with +1.0pt, and gross profit +25.2% year-on-year.

Segments

Total Contract Value

Take Rate

Gross Profit

1. Matching Business
2. Project Contracting
   Business

Other

Total

9,461 million yen		21.6%		2,040 million yen
(Year-on-year: +19.8%)		(Year-on-year +1.0%)		(Year-on-year +25.2%)

2,296 million yen		22.8%		523 million yen
(Year-on-year-8.9%)		(Year-on-year +1.8%)		(Year-on-year-1.3%)

116 million yen		37.9%		44 million yen
(Year-on-year-71.2%)		(Year-on-year-6.2%)		(Year-on-year-75.2%)

11,875 million yen		22.0%		2,607 million yen
(Year-on-year +9.7%)		(Year-on-year +0.4%)		(Year-on-year +11.5%)

• Take rate: Gross profit divided by total contract value. Ratio (%) of added value (gross profit) created from total contract value handled by the Company

25

(1) Matching Business: Total Contract Value

Total contract value for the matching business grew 19.8% year-on-year.
Though this growth was temporarily slowed due to coronavirus impact, it is currently on a
recovery trend.					9,461
			+19.8%
		Total contract value
								3,226	3,190
7,900	3,113
3,045
		[Units: Millions of yen]
2,638	2,723
2,538
2,344
	Irregular contracts
2,182			by a specific client
1,981
1,758

1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q
	FY 2018				FY 2019				FY 2020

26

(1) Matching Business: Net Sales

Net sales for the matching business grew +27.1% year-on-year, beating initial forecasts.

				+27.1%		4,679
			Net sales		1,535	1,587	1,556
				3,682
				1,433
				1,304
				1,236
[Units: Millions of yen]	1,148
				1,106

1,003

916

800

1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q
	FY 2018				FY 2019				FY 2020

27

(1) Matching Business: Gross Profit and Take Rate

Take rate improved to 21.5% with gross profit up +25.2% year-on-year, showing strong progress.

21.7%	22.4%	21.3%	21.9%			21.4%	21.8%
	21.1%
		20.5%	20.5%
				19.9%

				2,040
Gross profit			+25.2%
Take rate				702
		1,630	620	652
[Units: Millions of yen]		557	559
	513	520

21.5%

684

443

381

464

1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q
		FY 2018				FY 2019			FY 2020

28

(2) Project Contracting Business: Total Contract Value and Net Sales

Downsized per initial policy. Denen and IOSI, which account for 95% of project contract business sales, were sold to SB Technology Corp., with their performance excluded from performance in Q4 and onward.

			Total contract value/ Net sales		2,519	-9.7%	2,276
957			921
920
[Units: Millions of yen]			854
				744	758	766
				689
626

587

551

1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q
		FY 2018				FY 2019			FY 2020

29

(2) Project Contact Business: Gross Profit and Take Rate

Downsized per initial policy. Denen and IOSI were sold to SB Technology Corp., with their performance excluded from performance in Q4 and onward.

Gross profit

Take rate

282					-1.3%	523
			529
[Units: Millions of yen]
34.4%
			220			223
29.5%		25.5%
189					21.1%	23.0%
		23.9%	17.9%	24.1%
		175
		21.2%			176
					20.4%
			158		159
	17.6%		152
						123
	110

1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q
		FY 2018			FY 2019				FY 2020

30

Status of Business KPIs and FY 2020 Investment

31

Status of FY 2020 Investment in Matching Business

We have suspended TV commercials (launched in Q2), and boosted investment in web advertisements in Q3. From Q4, we will resume TV commercial test marketing nationwide (incl. the Kanto region).

Impact on initial full-year
operating income	Current progress	Policy going forward
expectation

Expanding investment to acquire clients

TV commercial test marketing

Developing high-rate clients and large-

scale corporate clients

Sales structure expansion

Improved support helpline

system,

developing APIs, shifting to AI

for ordering infrastructure

From -450 million

yen to -550 million yen

-50 million yen

No big impact

Keep investing on web

advertisement. From Q4 (July), broadcasts resume nationwide

Sales hires concluded. Focus on productivity improvement

Personnel hires

concluded.

Focus on productivity

improvement

Review of Q4 TV

commercial impact is

to drive next year's

policymaking

Continue to focus on

boosting strength

of sales force

Continue to bolster

order support system

for clients

32

(Reference) Matching Business: Client KPI FY 2019 Results

Matching business KPI: Order value per client

		Annual average
		contract values per client
All clients		306 thousand
	yen

Annual number of clients ordered contracts

Annual average contract values per client (units: thousand yen)

Number of clients ordered = Total contract value

Annual number of clients	Total contract value
ordered contracts

36,042		11,010 million
companies		yen

306

252

212

132

183

141

19,957

36,042

32,789

26,353

15,475

9,555

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

• Figures for client KPI have been revised to reflect a change in the Company's business segments.

33

(Reference) Matching Business: Worker KPI FY 2019 Results

Matching business KPI: Order value per worker Number of workers ordered =Total contract value

Annual average	Annual number of workers
contract values per worker	ordered contracts

Total contract value

All workers		55 thousand yen		202,000
		workers

	44	42
39
	37

Number of the workers received contracts

Number of the workers increased by TV show broadcasted

Annual average contract values per worker (units: thousand yen)

11,010 million

yen

55

36

52,000

20,000

177,031181,991

32,279

151,127

86,896

49,996

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

• Figures for worker KPI have been revised to reflect a change in the Company's business segments.

34

Unit Economics Achievement: Prerequisite for Investment

Recover client acquisition expenses within one year and expand matching business investment. Average LTV per client (gross profit for a two-year period) = 27,267 yen

Marketing expenses per client = 13,457 yen

The recovery ratio of acquisition cost on 24th months = 202.6%

We will make the maximum investment within CPA(Cost Per Acquisition) we can recover on 12th month

Gross profit per client (24 months)

Profit per client

Acquisition cost

Cumulative gross profit for the two-year period following acquisition: 27,267 yen Recovery ratio of acquisition cost

on 24 months is over 200%

Average Acquisition cost: 13,457 yen

Acquisition costs recovered

on the 12th month

0 month

1 month

2 months

3 months

4 months

5 months

6 months

7 months

8 months

9 months

10 months

11 months

12 months

13 months

14 months

15 months

16 months

17 months

18 months

19 months

20 months

21 months

22 months

23 months

24 months

35

Business Outline / VISION / Management Policy

36

Company Profile

CrowdWorks Inc.

President and CEO	: Koichiro Yoshida
Capital	: 2,688,560,000JPY
Founded	: Nov 11, 2011
Services	:Operates internet services, primarily CrowdWorks, Japan's
	largest crowdsourcing service

• 3,935,000 people of CrowdWorkers (users)
• 641,000 clients
• 12 ministries and agencies
• 80 local government

*The numbers of workers and clients of CrowdWorks, Inc. services as of June, 30, 2020

37

VISION / To Build Japan's Largest Online Employment Infrastructure

Based on the vision to become the world's biggest platform that provides the largest amount of monetary rewards through the Internet, CrowdWorks aims first to build Japan's largest online employment infrastructure

By maximizing the total contract value, CrowdWorks gives monetary rewards to the largest number of people in the country

Image of Japan's largest online employment infrastructure

FY 2019

Total contract value:

$134.0M

(14.80billion yen)

Remuneration amount

11.6 billion yen

Total contract value

conversion: $22.8 billion

(2.50 trillion yen)

Japan's largest remuneration amount target	$16B
400,000 people average annual income $40.1 K	(1.76 trillion yen)
(4.41 million yen)

Employee number ranking *Reference: Yahoo Finance as of January 21, 2020

1. Toyota 374,000 people, 2. Nippon Telegraph and Telephone (NTT) 321,000 people, 3. Hitachi 298,000 people

Source: National Tax Agency "Results of the Survey on the Actual Status of Private

Salary for 2018"

The dollar notation is expressed as 1 dollar = 110 yen.	38

Business Policy: Increase Corporate Value Through Reinvestment

By maximizing the total contract value, the Company will steadily build up the base of long- term earnings

The Company will invest in growth resources obtained from the accumulated bases for improvement of existing services and new growth, and will aim for further improvement of corporate value

Increase

corporate value

Expansion of

growth investment

Increase in gross profit

Maximize the total

contract value

Current

corporate value

39

Client-Side Target Market Potential and Current Trends (FY2019 results)

Advent of new services, along with existing outsourcing/personnel dispatch markets result in targeting replacement of consulting/regular employee advertising markets

Outsourcing

WEB development

127 billion yen (contract value base)

CW potential:

13 billion yen

2 billion yen recorded

BPO

Personnel and customer care*

480 billion yen (contract value base)

CW potential:

48 billion yen

5 billion yen recorded

Outsourcing

SI and software

7 trillion yen (contract value base)

CW potential:

70 billion yen

3 billion yen recorded

BPO

Purchasing and accounting

370 billion yen (contract value base)

CW potential:

18 billion yen

Newly under consideration

Personnel dispatch

General office work

1,760 billion yen (contract value base)

CW potential:

176 billion yen

billion

0.5recordedyen

Part-time job

advertising

Recruitment advertising industry

150 billion yen (gross margin base)

CW potential:

15 billion yen

Newly under consideration

Personnel dispatch

IT technician

770 billion yen (contract value base)

CW potential:

77 billion yen

billion

3.5recordedyen

Regular employee job

advertising

Information and services industry

255 billion yen (gross margin base)

CW potential:

10 billion yen

Currently

expanding

Consulting

Systems and IT consulting

765.9 billion yen (contract value base)

CW potential:

14 billion yen

Currently

expanding

Regular employee job

referrals

Information and services industry

105 billion yen (gross margin base)

CW potential:

5 billion yen

Currently

expanding

*BPO market customer care includes operations such as call centers, large-volume data processing and collection, and field work.

40

Appendix

41

FY 2020 Profit and Loss Statement: Quarterly Transition

Total Contract Value		3,829 million yen	(YoY	+2.5%)
Net Sales				2,183 million yen	(YoY	-4.3%)
Gross Profit				805 million yen	(YoY	+1.7%)
Operating Profit		-83 million yen	(YoY	-108 million yen)
											[Units: millions of yen]
				FY2019 (Consolidated)			FY2020 (Consolidated)
		1Q	2Q	3Q	4Q	1Q	2Q	3Q		YoY	QoQ
Total contract		3,478		3,611	3,735	3,970	3,852	4,192	3,829		+2.5%	-8.7%
value
Net sales		2,027		2,203	2,282	2,236	2,342	2,546	2,183		-4.3%	-14.3%
Gross profit		764		781	792	784	850	951	805		+1.7%	-15.3%
SG&A expenses		750		758	767	798	871	945	889		+15.9%	-6.0%
Operating profit		13		23	25	-14	-21	5	-83		-108	-89
EBITDA		46		56	52	11	7	34	-53		-106	-88
Ordinary profit		13		34	25	-6	-4	2	-127		-153	-143
Profit attributable to		-2		-37	-30	-57	-13	-56	-105		-74	-48
owners of parent

• In compliance with financial statement regulations, actual figures are rounded down to the nearest million yen, and year-on-year amounts and percentage changes are calculated taking into consideration the value of less than one million yen.

42

Q3 FY 2020 Profit and Loss Statement

								[Units: millions of yen]
		Q3 FY2020 (Consolidated)				FY2020 Performance
					forecast(Consolidated)
	Results	Year-on-year	Vs. full-year		Q3 FY 2019		Full-year		Year-on-Year
	comparison	forecast(Past)		results		forecast(New)		comparison
Total contract value
11,875	+9.7%	73.6%		10,825		15,011		+1.5%
Net sales	7,072	+8.6%	78.8%		6,513		8,550		-2.3%
Gross profit	2,607	+11.5%	76.7%		2,338		3,300		+5.7%
SG&A expenses	2,706	+18.9%			2,276		From 3,800 to		From +23.6% to
			3,900		+26.8%
Operating profit	-98	-160			62		From -500 to		Advance deficit
			-600
EBITDA	-11	-167			155		From -400 to		Advance deficit
			-500
Ordinary profit	-115	-189			74				―
Profit attributable to	-175	-78			-96
owners of parent

• In compliance with financial statement regulations, actual figures are rounded down to the nearest million yen, and year-on-year amounts and percentage changes are calculated taking into consideration the value of less than one million yen.

43

FY 2020 Balance Sheet

				[Units: millions of yen]
	Q3 FY 2020 end		FY 2019 end	Compared with the end of the
	(consolidated)		(consolidated)	previous fiscal year
Current assets		5,050	5,220	170
Non-current assets		1,018	1,108	89
Total assets		6,069	6,328	259
Current liabilities		2,578	2,632	54
Non-current liabilities		432	450	18
Net assets		3,058	3,245	186
Capital adequacy ratio		49.6%	50.4%	0.8%

• In compliance with financial statement regulations, actual figures are rounded down to the nearest million yen, and year-on-year amounts and percentage changes are calculated taking into consideration the value of less than one million yen.

44

Workers' Market as a High Potential of Business Opportunities

With labor categories such as potential labor, irregular employees, regular employees, and dispatch employees as our targets, we will use online conversion to develop new markets and expand the scope of our business.

Target market

Potential

labor force

Non-regular

employee

(Contract employee) (Part-time employee)

Regular

employee

Temporary

employee

Provided value

Activation

1. Stable new revenue source
2. Can work in a favorite time and place
3. Safety net

Side-jobs/dual-work

1. Provide a second income source
2. Improvement of skills and experience

Side-jobs/dual-work

1. Provide a second income source
2. Improvement of skills and experience

Job-mobility,work-style reform

1. A free working style possible more than temps

Target

number of

people

5.6 million

people

19 million people

11 million people

1.3 million

people

	Total
Assumed	Addressable
income	Market (TAM*)

$15K		$85B
(1.69		(9.4
million yen)		trillion yen)

$15K		$292B
(1.69		(32.1
million yen)		trillion yen)

$4.5K$50B

(0.5(5.5

million yen)trillion yen)

$24K		$32B
(2.62		(3.5
million yen)		trillion yen)

Future

Futurebusiness

sharescale

4.5%	$3.8B
(423

billion yen)

4.5%	$13.1B
(1.44

trillion yen)

4.5%	$2.3B
(247.5
	billion yen)
4.5%*	$1.4B
(157.5
	billion yen)

*TAM: The largest market size that can be earned by the growth of our business The dollar notation is expressed as 1 dollar = 110 yen.

Source: Statistics Bureau of the Ministry of Internal Affairs and Communications (2018) Labor Force Survey in 2017

Source: National Tax Agency Planning Division (2018) Survey on the Actual Status of Private Salary for 2017

Source: Ministry of Health, Labour and Welfare (2018) 2017 Survey on Temporary Employees

Source: en-japan inc. (2018) Estimates from the Company based on an actual survey of "side jobs" from listening to 3,000 regular employees

Total		$460B
	(50.5
		trillion yen)
*Reference	Total private salary income in Japan

(Regular+non-regular+dispatch) is about $1,936B (213 trillion yen)

4.5%	$20.6B
(2.27

trillion yen)

*A future share of 4.5% is the market share ratio of one major company in the temporary market (sales revenue of $1.5B:160 billion yen)

45

Our Mission

Bring a smile to everyone

through work

46

[Precautions concerning future prospects]

Forward-looking statements such as the business forecasts described in this material are not intended to promise the realization of the Company. Please note that the actual results may differ depending on various factors.

[Inquiries concerning this material] CrowdWorks Inc.

IR group https://crowdworks.co.jp/E-mail: [e-mail]

Disclaimer: This document is a translation of the Japanese original. The Japanese original has been disclosed in Japan in accordance with Japanese accounting standards and the Financial Instruments and Exchange Act. This document does not contain or constitute any guarantee and the Company will not compensate any losses and/or damage stemming from actions taken based on this document. In the case that there is any discrepancy between the Japanese original and this document, the Japanese original is assumed to be correct.

47